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The point of total assumption (PTA) is a point on the cost line of the profit-cost curve determined by the contract elements associated with a fixed price plus incentive-Firm Target (FPI) contract above which the seller effectively bears all the costs of a cost overrun. The seller bears all of the cost risk at PTA and beyond, due to a dollar for dollar decrease in profit beyond the costs at the PTA. In addition, once the costs on an FPI contract reach PTA, the maximum amount the buyer will pay is the ceiling price. Note, however, that between the cost at PTA and when the cost equals the ceiling price, the seller is still in a profitable position; only after costs exceed the ceiling price is the seller in a loss position. ==Calculation== Any FPI contract specifies a target cost, a target profit, a target price, a ceiling price, and one or more share ratios. The PTA is the difference between the ceiling and target prices, divided by the buyer's portion of the share ratio for that price range, plus the target cost. PTA = ((Ceiling Price - Target Price)/buyer's Share Ratio) + Target Cost For example, assume: PTA = ((2,450,000 - 2,200,000)/ 0.80) + 2,000,000 = 2,312,500. If for a moment, PTA is given and you are trying to calculate the ceiling price for the buyer (maximum amount that the buyer will have to spend),the calculation will be (2,000,000 (target cost) + 200,000 (the profit the buyer pays to the seller) + (2,312,500 - 2,000,000) *0.8 = 2450000. This is a term used in project management when managing specific fixed price contracts. The reason to calculate PTA is that when executing the contract, actual cost is the only finance measurement. Compare this measurement with the cost base line to calculate Cost Performance Index (CPI), then we can estimate (forecast) the cost at Completion ('EAC' – Estimate at Completion – according to PMBOK, or 'FAC' – Forecast at Completion – in Ms Project). If EAC exceeds PTA, the buyer is expected to pay the ceiling price, and any more overruns beyond PTA will cause a dollar for dollar decrease in profit for the seller. The profit decrease rate become higher, and once actual cost exceeds ceiling price the seller will start losing money(and then might stop working for the contract). From the risk management point of view, EAC should be controlled under PTA to keep this risk far away. When "EAC exceeds PTA" is found in control cost process, it should be treated as a risk trigger. 抄文引用元・出典: フリー百科事典『 ウィキペディア（Wikipedia）』 ■ウィキペディアで「Point of total assumption」の詳細全文を読む スポンサード リンク
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